GoPro (GPRO) has been falling apart for some time now. However, this holiday season is a big one for the company. Those that are still holding on are hoping to see large sales volumes through the holidays thanks to new product releases and an entrance into a new industry entirely. Below, we’ll talk about the new products, why the hype is a bit much and why I believe that the best thing to do with GPRO is to short it!

The Reason For Recent Excitement Surrounding GPRO

There’s a big reason for recent excitement surrounding GoPro. That reason has to do with new product releases. Just a couple of months ago, the company released two products, one of which brings the company into an emerging industry that could explode.

• Hero 5 – The first product that was released by the company is the Hero 5. It is the latest and greatest in the line of extreme action cameras manufactured by GPRO. However, this is nothing to to the company, the big story is the next product…
• Karma – The big story surrounding GPRO at the moment is its entrance in the emerging drone industry. At the same time as the release of the Hero 5, the company released the Karma. The Karma is the first in what investors are hoping to be a successful line of video drones. These areal acrobats take stunning images and videos as they fly.

The idea that the bulls seem to be hanging onto here is that the Karma will save the struggling company. They hope that this holiday season, sales will climb dramatically, thanks to the new product. If this is indeed the case, the stock would likely skyrocket.

Don’t Play Into The Hype

The truth is that I completely understand why the bulls are so excited. Bringing a new product into an emerging industry is generally a great thing. And there’s no doubt that GoPro is great at creating top of the line products. However, in my opinion, the hype is a bit much.

At the end of the day, GPRO has always created incredible products. However, there’s a big area where they have fallen short. For some reason, the company can’t seem to build an effective marketing plan. With more and more competition in the extreme action camera sector, sales haven’t looked good recently.

So now, the company has decided to enter into the drone industry. I will admit, the Karma is a great drone. Again, GPRO is known for creating great products. However, the Karma isn’t likely to save the company. The truth is that the drone industry is already more competitive than the extreme action camera industry. Not to mention, the industry already has a clear and defined leader with DJI. At the end of the day, if GoPro can’t compete in an industry it created, it will likely have big problems trying to compete in the drone industry.

Why This Is A Big Short Opportunity

At the end of the day, investors are likely to continue with the good and evil battle surrounding GPRO for some time to come. However, once sales numbers are released following this holiday season, the stock is likely to fall substantially. In my opinion, the short side is the strong side at the moment.